Jerome Powell

Jan. 12 (UPI) — Sen. Lisa Murkowski, R-Alaska, on Monday called on Congress to investigate the Department of Justice’s probe of Federal Reserve Chairman Jerome Powell, which she described as “an attempt at coercion” by President Donald Trump.

Powell revealed Sunday night he received a subpoena from the Justice Department threatening him with criminal charges over testimony he gave to Congress last year about the cost of renovating historic Federal Reserve buildings. He accused the Trump administration of using the testimony as a pretext to punish him and the Fed for failing to set federal interest rates based on Trump’s preferences.

In a statement Monday, Murkowski echoed Powell’s stance, saying the project cost overruns “are not unusual.”

“After speaking with Chair Powell this morning, it’s clear the administration’s investigation is nothing more than an attempt at coercion,” she said, calling for an investigation of the Justice Department.

“The stakes are too high to look the other way: If the Federal Reserve loses its independence, the stability of our markets and the broader economy will suffer.”

Murkowski said she supported Sen. Thom Tillis, R-N.C., who said Sunday that he would vote against confirming a new head of the Federal Reserve “until this legal matter is fully resolved.”

Trump has said he plans to replace Powell when his four-year term is up later this year. The president has repeatedly taken Powell to task for not cutting interest rates as frequently and by as much as he wants. Trump appointed Powell to his first four-year term in 2018, and former President Joe Biden renewed his position in 2022.

“If there were any remaining doubt whether advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” Tillis said in a statement. “It is now the independence and credibility of the Department of Justice that are in question.

In an appearance on NBC News on Sunday, Trump said he has no knowledge of the Justice Department’s plans to investigate the Federal Reserve.

“I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” Trump said of Powell.

Trump threatened to sue Powell in August over the the planned renovations, citing the “horrible and grossly incompetent job he has done in managing the construction of the Fed Buildings.” The president said the cost of the renovations exceeded $3 billion, but all the project needed was a “$50 million dollar fix up.”

During a tour of the renovations in July, Powell disputed Trump’s claims that the project exceeded $3 billion, saying the estimate was closer to $2.5 billion.

Trump told NBC News that the Justice Department’s probe isn’t related to benchmark interest rates.

“No. I wouldn’t even think of doing it that way. What should pressure him is the fact that rates are far too high. That’s the only pressure he’s got,” Trump said of Powell.

“He’s hurt a lot of people. I think the public is pressuring him.”

Markets in Europe showed little movement on Monday after a broad rally in Asia.

US futures dipped, meanwhile, after Federal Reserve Chair Jerome Powell said the Department of Justice had served the central bank with subpoenas.

Powell noted that the threat of a criminal indictment relates to his testimony about the Fed’s building renovations.

President Donald Trump insisted that he did not “know anything” about the investigation that escalates a nearly year-long feud between the government and the central bank.

When asked by NBC if the probe is intended to pressure Powell on rates, Trump said: “No. I wouldn’t even think of doing it that way.”

Trump has nonetheless criticised the $2.5 billion (€2.13bn) renovation of two Fed office buildings as excessive.

Gold and silver continue to rise

Markets appeared to take the news in their stride, although gold and other safe-haven assets climbed.

Gold vaulted over $4,600 an ounce, shooting up over 2.5%, and silver approached $85 for the first time, rising over 7%. Copper futures in the US jumped by 2.52% to $6.051.

Powell’s term as chair ends in May, and Trump administration officials have signalled that he could name a potential replacement this month. Trump has also sought to fire Fed governor Lisa Cook, another move that chips away at central bank independence.

Gold’s rise is also linked to unrest in Iran as nationwide demonstrations against leader Ayatollah Ali Khamenei enter a third week. More than 500 people have been killed during the demonstrations, according to the US-based Human Rights Activists News Agency, including 490 protesters.

President Trump said that he intends to intervene in the country if the Iranian government continues to kill protestors.

US futures dip lower

Futures for the S&P 500 dipped by 0.53% a few hours before daily trading started on Wall Street.

Futures for the Dow Jones Industrial Average fell 0.67%, while the Nasdaq composite index slipped 0.71% in pre-market trading.

Last Friday, US stocks hit records following a mixed report on the US job market. The data may delay another cut to interest rates by the Federal Reserve but does not entirely rule out the possibility.

The S&P 500 climbed 0.65% to 6,966.28, topping its prior all-time high set earlier in the week. The Dow Jones Industrial Average added 0.5% to 49,504.07 and likewise set a record. The Nasdaq composite led the market with a 0.8% gain, closing at 23,671.35.

The US Labor Department said employers hired fewer workers during December than economists expected, though the unemployment rate improved and was better than expected. An update on US inflation at the consumer level is due Tuesday, followed by a report on wholesale prices on Wednesday.

In other dealings early Monday, the dollar fell to 157.8180 Japanese yen, a daily drop of less than 0.1%. The euro climbed to $1.1691, a 0.49% rise.

US benchmark crude oil gave up early gains, falling to $58.91 per barrel. Brent crude, the international standard, dropped to $63.18 per barrel.

Rest of the world

In Germany, the DAX was nearly flat at 25,358.17, while France’s CAC 40 also showed modest movements, coming to 8,359.71 by mid-afternoon. Britain’s FTSE 100 edged less than 0.1% higher, to 10,127.05.

In Asian trading, Hong Kong’s Hang Seng gained 1.44% to 26,608.48, while the Shanghai Composite index jumped 1.09% to 4,165.29 after reports that Chinese leaders were preparing additional support for the economy.

In South Korea, the Kospi added 0.84% to 4,624.79 while Australia’s S&P/ASX 200 gained 0.48% to 8,759.40. Taiwan’s Taiex gained 0.92%.